What is GDP Per Capita?

Definition: The GDP Per Capita measures the total economic output of a country per each of its individual habitants. In other words, it reflects the country’s production per individual.

What Does GDP Per Capita Mean?

The concept of GDP per capita is used as a competitive measurement to compare countries’ economies. The GDP per capita is calculated by using the Gross Domestic Product figure (real or nominal) and dividing it by the country’s total population. It is assumed that a high GDP per capita means a high standard of living but there are many other factors that must be taken into account when evaluating the competitiveness of a given economy.

GDPs are normally calculated by using the country’s domestic currency, but when it comes to comparisons the standard currency is the US$. This means that currency values play an important role in comparing GDP per capita of different countries. By 2015, Qatar was the country with the highest GDP per capita, followed by Luxembourg. And by that year, the country with the lowest GDP per capita was Somalia, followed by the Central African Republic.

Here’s an example.


The Central Bank of country ABC just released the last year economical statistics. This statistics cover a wide range of variables including the GDP figures. According to the Central Bank, the Nominal GDP was $28,675,940,102. On the other hand, the government just informed that last year total population was $1,159,129. What would be the GDP per capita of this country?

According to our concept, the GDP per capita is calculated by dividing the Gross Domestic Product by the country’s total population. By using the numbers given in the example described above, the GDP per capita of ABC would be $24,739.21. By comparing this figure with GDPs per capita of countries like Qatar ($145,000) or Luxembourg ($102,900), this country is at least 4 or 5 times less productive than those two countries, but it is in a far better shape than African countries such as Somalia (estimated at $400).